CIMA Exam CIMAPRO19-P02-1 Topic 7 Question 94 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 94
Topic #: 7

Which of the following statements is TRUE about the activity based costing system when compared to absorption costing method?

AABC is easier to administer than an absorption costing system

BABC will be less detailed than an absorption costing system

CABC will provide more accurate overhead allocation than absorption costing

DABC will cost less to administer than an absorption costing system

Show Suggested Answer

Suggested Answer: C

by Lovetta at Aug 08, 2024, 03:22 AM

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Loise

4 months ago

That's a good point, but the accuracy of overhead allocation is crucial for decision-making, so I still think C is the best answer.

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Bok

4 months ago

All these costing methods make my head spin, but I think C is the one that makes the most sense. Why settle for less accurate when you can have more?

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Maryrose

4 months ago

I think you're right. It's important to have accurate overhead allocation for better decision-making.

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Amie

4 months ago

I agree, C does seem like the most logical choice. Accuracy is key when it comes to costing methods.

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Lenora

5 months ago

Haha, I bet the people who designed absorption costing were just lazy and didn't want to put in the extra effort for ABC. C is the way to go!

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Paola

5 months ago

I'm going with C as well. Isn't that the whole point of ABC, to better reflect the actual costs associated with each product or service?

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Aileen

4 months ago

Yes, that's right. ABC is designed to provide a more accurate picture of the true costs involved in producing a product or service.

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Darrin

4 months ago

I agree, C seems like the most logical choice. ABC is all about accurately allocating overhead costs.

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Talia

5 months ago

But wouldn't ABC be more complex and costly to administer compared to absorption costing?

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Tonja

5 months ago

Definitely C. ABC is designed to give a more precise distribution of indirect costs, which is really important for decision-making.

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Leota

4 months ago

Yes, C is definitely the right answer. ABC provides a more accurate way to allocate indirect costs.

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Margarett

4 months ago

I think C is the best choice too. It's important to have accurate overhead allocation for decision-making.

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Rikki

4 months ago

I agree, C is the correct answer. ABC is all about accurately allocating overhead costs.

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Felicia

5 months ago

I agree with Loise, ABC focuses on activities and allocates costs based on usage, so it should be more accurate.

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Nana

5 months ago

I think option C is the correct answer. ABC provides a more accurate allocation of overhead costs compared to absorption costing.

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Sabrina

4 months ago

I also believe option C is correct. ABC is all about improving the accuracy of overhead allocation.

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Tamra

4 months ago

Yes, option C is the right choice. ABC is designed to allocate overhead costs more accurately than absorption costing.

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Daniel

4 months ago

I think option C makes sense. ABC focuses on allocating overhead based on activities, leading to more accuracy.

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Daren

4 months ago

I agree, option C is the correct answer. ABC is known for providing more accurate overhead allocation.

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Loise

5 months ago

I think the answer is C) ABC will provide more accurate overhead allocation than absorption costing.

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